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Figuring out your investment style is important when you start with investing. Determining the right investment style for you is necessary because it has a great influence on the return of your portfolio and for reaching your goals. Make your housework very carefully and check regularly if your investment style didn't change since you started with investing. Your investment style will probably not be the same on the age of 20 years as when you will reach the age of retirement.

Your investment style is the basic to make the right decisions of investing your money. Which are now the factors which have an influence on your investment style?

1) YOUR AGE AND YOUR RISK TOLERANCE

Risk tolerance is something individual and there is always a certain risk that you lose some money. If you can't live with some losses of your investments you can better put all your money on a savings account; you don't lose money but your return will also not be high. The time of high interest rates on savings accounts is gone and alternatives are necessary.
Your age is important to determine your risk tolerance; probably you are willing to take more risks when you are younger than in case you are 60 or more. You don't want to lose your money which you saved before your retirement.

2) YOUR CURRENT INCOME AND YOUR EXPECTATIONS FOR THE NEAR FUTURE

An important issue to determine your investment profile is your annual income and the expectations for the near future. Can you afford it to save a lot of money every month or only small amounts? Is there a possibility of a growth of your income the next years? The answer to these questions is important to decide for choosing a profile with a high risk factor.

A high risk factor means that you invest for the long term in shares or mutual funds which invest in a high percentage of shares. When your answer is positive you can consider choosing for an aggressive investment style if you are not worried that during certain times your invested money drop with high percentages. On the long term your return will mostly be higher than a defensive profile if you pay attention on the necessary diversification of your portfolio.

3) YOUR PLANS IN THE NEAR FUTURE

Maybe you are planning to buy a house next year or within a short time or you want to do some expensive purchases. In this case it is more likely to choose for a defensive investment style because you will need a lot of money in the near future and if you should invest your money in shares or mutual funds which

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